Depositors rush to withdraw funds from troubled banks

Depositors rush to withdraw funds from troubled banks

JAKARTA (JP): Thousands of anxious depositors rushed to
withdraw their deposits Monday from the seven banks placed under
the management of the Indonesian Bank Restructuring Agency (IBRA)
by the government over the weekend.

Hundreds of people lined up at the headquarters of Bank
Danamon on Jl. Sudirman, South Jakarta, Bank Modern on Jl.
Thamrin, Central Jakarta, and Bank Umum Nasional (BUN) on Jl.
Rasuna Said, South Jakarta, to withdraw their money.

The government announced Saturday that IBRA had taken over the
management of Bank Danamon, Bank Dagang Nasional Indonesia
(BDNI), BUN, Bank Tiara Asia, Bank PDFCI, Modern Bank and state
Bank Ekspor-Impor Indonesia (Exim).

Most customers said they wanted to withdraw their money
despite repeated government assurances that their deposits were
totally guaranteed by the central bank.

Thousands of customers reportedly withdrew funds from Bank
Danamon branches in Bandar Lampung and Tanjung Karang in Sumatra.

Hundreds of people were seen rushing into Bank Exim's branches
on Jl. Raden Intan, in Tanjung Karang, and Jl. WR Supratman,
Teluk Betung in Sumatra, Antara reported Monday.

"People do not trust the government anymore despite its
assurances," an executive at Bank Danamon said.

BDNI and Bank Danamon branches in Aceh were also overrun by
panicked customers wanting to withdraw their money.

Massive withdrawals took place at Bank Exim, BUN and Bank
Danamon in Mataram in Lombok, West Nusa Tenggara.

Similar scenes occurred at Bank Danamon offices in Manado,
Tomohon and Bitung in North Sulawesi where customers hurried to
withdraw their deposits from both tellers and automated teller
machines (ATMs).

Most customers were disappointed to find that Bank Danamon's
ATMs had either run out of cash or did not work.

Mounting fears that the country's banking industry may be on
the brink of collapse also caused massive withdrawals at some
banks not under IBRA management.

Hundreds of depositors were seen lining up at Bank Central
Asia's branch in Cakranegara, Bali, to withdraw their deposits.

IBRA vice chairman Rini M Soewandi said the government would
take over the ownership of the suspended banks after they held
their annual shareholder meetings next month.

Rini, who is also finance director of the country's largest
automaker PT Astra International, said Monday the owners of the
suspended banks would remain responsible for their banks'
liabilities.

She said IBRA would evaluate the banks' assets and match them
with the total liquidity credits they had received from the
central bank.

"If their assets are not sufficient to repay the central bank
credits, the owners of the banks will be held responsible for
repaying the liquidity credits," she said.

Asked if the government should ban the owners from leaving the
country, Rini said: "It's up to the Minister of Finance."

Widigdo Sukarman, the president Bank Negara Indonesia (BNI),
which was assigned to repay the depositors of the suspended
banks, said Monday that not all of the depositors would withdraw
their money from his bank.

"We expect at least 85 percent of them will keep their
deposits in new accounts at BNI," he said. (aly)